Abstract
Universal Display will report its quarterly results on February 19, 2026, Post Market, with investors watching revenue, margins, and adjusted EPS trajectories as management updates segment performance and guidance for the new fiscal year.Market Forecast
Consensus for the current quarter points to revenue of $173.03 million, EBIT of $64.34 million, and adjusted EPS of $1.28, with year-over-year growth implied at 15.34% for revenue, 23.54% for EBIT, and 20.52% for EPS. Forecasts do not include gross margin or net margin figures, and management has not provided a quantitative margin outlook for the quarter.Within the company’s revenue mix, materials sales remain the core driver, and shipment timing versus panel production schedules will shape quarter-end topline and margin mix. Royalties and license fees are the most promising growth lever, supported by the expansion of customer licensing agreements; last quarter royalties recognized were $53.32 million, with an upward trajectory supported by recently renewed and extended agreements, and the year-over-year comparison for this segment is not disclosed in company data.
Last Quarter Review
Universal Display delivered revenue of $139.61 million, a gross profit margin of 73.11%, GAAP net profit attributable to the parent company of $44.03 million, a net profit margin of 31.53%, and adjusted EPS of $0.92; total revenue fell 13.62% year-over-year, and adjusted EPS declined 34.29% year-over-year.A noteworthy financial detail is that GAAP net profit decreased quarter-on-quarter by 34.55%, reflecting a softer shipment cadence and product mix, while the gross margin remained high, indicating continued pricing discipline and favorable materials margin structure. Main business highlights show materials revenue of $82.63 million (59.19% of total), royalties and license fees of $53.32 million (38.19%), and contract research services of $3.66 million (2.62%), reinforcing the dominance of materials and royalties in the revenue stack; segment-level year-over-year changes were not disclosed.
Current Quarter Outlook
Materials: Core Revenue Engine and Margin Anchor
Materials shipments are the backbone of Universal Display’s quarterly performance and continue to set the pace for revenue and margin realization. The current consensus indicates a rebound versus last quarter’s shipment softness, with total revenue expected to rise 15.34% year-over-year and EBIT expected to expand 23.54% year-over-year, a pattern consistent with healthier materials volumes and favorable emitter-mix through the quarter. Product mix is crucial: higher-value emissive systems typically support the company’s premium gross margin profile, and when the quarter skews toward higher-emitter sales, margins historically lift. The fourth-quarter cadence often aligns with device production schedules from large panel manufacturers and smartphone program completions, and consensus figures imply that panel customers maintained solid materials pull-through late in the year.In assessing the materials pathway for this print, inventory positions at customers and timing of fulfillment can compress or expand quarterly revenue, even if underlying demand trends are stable; the expected scaled EBIT improvement suggests operating leverage on the materials side as volume normalizes from the prior quarter’s trough. Additionally, commentary on the breadth of materials shipments across mobile, IT, and other device categories will be central to understanding whether the quarter’s outperformance is broad-based or concentrated in one or two customer programs. While margin forecasts are not provided, a 73.11% gross margin baseline last quarter underscores the headroom for profitability if the product mix and volumes align with sell-side expectations.
Royalties and License Fees: High-Potential Recurring Growth Lever
Royalties and license fees recognized last quarter were $53.32 million, representing 38.19% of revenue and underscoring the importance of recurring licensing economics to overall earnings power. This segment benefits from the cumulative effects of technology adoption across customer programs and the expansion or extension of long-term agreements. On January 6, 2026, Universal Display announced a long-term OLED technology and materials agreement with Tianma Microelectronics, which supports a larger licensed base and, by extension, potential incremental royalties as the partner ramps units. This kind of licensing continuity materially strengthens visibility for future periods, and it can offer resilience relative to more volatile materials shipment timing.Customer diversification across applications, including smartphones, tablets, monitors, and emerging automotive displays, has also become increasingly relevant as shipments broaden beyond historical core categories. In January 2026, multiple monitor brands unveiled new OLED models, indicating continued proliferation of OLED-based products in IT displays; while unit volumes and mix recognition are variable quarter-to-quarter, broader adoption can underpin royalties as licensed technology scales into additional device families. The royalties and license fees segment, given its fixed-ratio nature to end-use units, is positioned to benefit from both breadth and depth of customer adoption. The consensus view that EPS will expand by 20.52% year-over-year this quarter correlates with improved contribution from recurring revenue streams alongside materials recovery, suggesting that royalties are a non-trivial component of the anticipated earnings improvement.
Stock-Price Drivers: Revenue Mix, Guidance Color, and Operating Discipline
This quarter’s share-price response will hinge on the interplay between reported revenue mix and management’s guidance for the next period. If materials volumes rebound in line with expectations and the company reiterates confidence in the licensing pipeline, investors are likely to focus on the durability of the revenue base and the trajectory of adjusted EPS. The consensus EPS estimate of $1.28 implies meaningful operating leverage versus last quarter, and confirmation of that leverage in reported results will be a focal point for market reaction.Guidance commentary around customer program timing and the breadth of shipments across end markets will be closely parsed. Updates around license renewals or new agreements can tilt sentiment, especially when the company indicates that licensed partners plan to scale volumes across product lines or expand to new applications like automotive displays. Recent announcements in automotive displays and IT monitors signal that OLED deployments continue to advance through multiple categories; while the direct quarterly revenue impact depends on unit timing and recognition policies, management’s color on these vectors will shape expectations for the next few quarters.
Cost discipline and margin resilience are also key themes. A 73.11% gross margin last quarter and a 31.53% net margin reflect a robust margin structure, even in a softer revenue quarter. If this quarter’s gross margin and net margin maintain comparable levels in the face of revenue expansion, the market may infer improved margin quality and a stable pricing environment for high-value materials. Investors will also listen for any commentary on inventory levels at customers, the timing of materials shipments into panel maker production schedules, and the cadence of royalties recognition, as these mechanics determine near-term volatility and the sustainability of growth implied by the current consensus.
Analyst Opinions
Across the sell-side previews compiled since January 1, 2026, the majority tilt bullish for Universal Display’s upcoming quarter, grounded in the expectation of double-digit year-over-year growth in both revenue and EPS and supported by improved EBIT momentum. The aggregate forecasts embed revenue of $173.03 million, up 15.34% year-over-year, and EPS of $1.28, up 20.52% year-over-year, which reflect constructive assumptions for materials shipments and steady contributions from royalties and license fees. The bullish camp points to the recurring nature of licensing revenue and the anticipated normalization of materials volumes following last quarter’s shipment softness; they emphasize that a high gross margin profile affords meaningful operating leverage when volumes recover.The central argument from bullish analysts is that the company’s earnings power is not solely a function of quarter-to-quarter materials shipments, but also of widening licensed adoption that accrues royalties as customer devices scale. They expect EBIT to grow 23.54% year-over-year, which aligns with the thesis that both top-line and operating efficiency will improve together this quarter. Commentary also highlights the significance of recent customer agreements and the signaling effect of expanding OLED usage across product categories in early 2026, all of which underpin constructive expectations for revenue visibility. The consensus framework suggests that if management’s guidance supports continued growth in the licensed base and steady materials demand, the stock’s near-term trajectory will be supported by an improved mix of recurring and volume-driven revenue streams.
In the majority view, the key variables to watch on the call are: confirmation of materials mix and shipment timing aligning with estimates; clarity on the pace of royalties recognition relative to customer unit ramp; and the margin arc through the quarter as reported. Analysts in this camp argue that the combination of elevated margins, returning volumes, and recurring royalties place Universal Display in a favorable position to surpass last quarter’s trough dynamics and validate the double-digit growth embedded in consensus models. While the exact magnitude of upside depends on the interplay of customer program timing and product mix, the prevailing expectation is that the company will deliver a cleaner quarterly progression in revenue and earnings versus the prior period’s softness.